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ARDEN HILLS CITY COUNCIL—DECEMBER 8, 2014 9 Further discussion ensued regarding the budget and where it stands at this point, given the amendments proposed by the Council. City Administrator Klaers proposed that the Council use reserves to balance the budget. Director of Finance and Administrative Services reported that the Council has reduced the budget by $20,374 through the budget amendments approved this evening. This would make the 2015 budget amount to be approved to be $17,809,180. The amended motion carried 4-1 (McClung opposed). MOTION: Councilmember Holmes moved and Mayor Grant seconded a motion to approve Resolution #2014-064 — Setting the Final Lew to Taxes Payable in 2015 to be $3,401,576. Councilmember McClung proposed an amendment to the levy and that the increase be capped at 2.6%with the remaining unallocated budget amount to be funded by reserves. AMENDMENT: Councilmember McClung moved and Councilmember Holmes seconded a motion capping the 2015 tax levy be $3,345,775 with the remaining unallocated budget amount to be funded by reserves. Mayor Grant estimated that the City would need approximately $70,000 in reserves to cover the budget shortfall. Director of Finance and Administrative Services explained that the tax levy would be decreased to $3,345,775. She reported that the amount that would be needed from reserves would be $74,799. Councilmember McClung indicated that the City has had overages for the last three years. He believed that this overage should be used to assist with budget expenses in order to reduce the tax levy amount. Mayor Grant commented that he could support the use of$30,000-35,000 in reserve funds but not $75,000. Councilmember Holmes agreed stating that she did not believe it made sense to balance a budget through reserves. She believed that the overage should be placed in the PIR fund. She indicated that residents wanted their streets improved and were willing to pay higher taxes in order for this work to get done. Councilmember Holden suggested that $50,000 be taken from reserves to balance the budget, which would set a levy amount of 3%. Mayor Grant suggested a friendly amendment requesting that only $35,000 from reserves be allocated in 2015.